# In the matter of Auro Gold Jewellery Private Limited CP (IB) 1802-MB-2019

> NCLT judgment dated 2022-11-18. Citation: TCN-2022-NCLT-00398. The State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 18 Nov 2022
- **Citation:** TCN-2022-NCLT-00398
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/auro-gold-jewellery-private-limited-cp-ib-1802-mb-2019-9ee4071a

## Summary

### Background

The State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Auro Gold Jewellery Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The financial creditor claimed a default of Rs. 468,49,72,838.84 as of March 7, 2019, with the original date of default being September 30, 2014. The financial creditor detailed a series of credit facilities granted to the corporate debtor over several years, along with various security documents executed to secure these loans. The corporate debtor acknowledged the debt in multiple letters but argued that the petition was barred by limitation. The financial creditor argued that the corporate debtor's acknowledgements of debt extended the limitation

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## Facts

State Bank of India (SBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Auro Gold Jewellery Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The total amount of debt alleged to be in default is Rs. 468,49,72,838.84 as of March 7, 2019. The date of default is September 30, 2014. SBI had sanctioned credit facilities to Auro Gold Jewellery Private Limited over several years, starting with a sanction letter dated August 20, 1997. Various security documents, including equitable mortgages, agreements of hypothecation, and deeds of guarantee, were executed by the Corporate Debtor to secure the loans. The Corporate Debtor made repeated requests for renewal and enhancement of credit facilities,

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## Issues and analysis

### Issue 1: Whether the application under …

**Ratio:** The Adjudicating Authority (NCLT) is required to admit the application under Section 7 of

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**Reasoning:** The NCLT relied on the Supreme Court's judgment in Swiss Ribbons Pvt. Ltd. & Ors. Vs.

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The NCLT found that the application made by the Financial Creditor was complete

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Appellants:** State Bank of…
- **Respondents:** Auro Gold…

## Timeline

- **1993-10-20 — Incorporation of…**: Auro Gold Jewellery Private Limited was…
- **1997-08-20 — Sanction…**: Financial Creditor sanctioned credit…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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